Key Points

• Several market indicators mirror that of the dot-com bubble of late 1999.

• When that tech bubble popped, the Nasdaq plunged 78% over three years.

• Here's what's similar about today's AI-crazed market, what may be different, and what investors should do now.

• 10 stocks we like better than NASDAQ Composite Index ›

Investors have ridden an incredible recovery from the April 2 "Liberation Day" tariff surprises. Since the April 8 low, the Nasdaq Composite (NASDAQINDEX: ^IXIC) has appreciated an incredible 40%. And of course, that recovery has taken place amid a decade-long bull market in technology growth stocks.

It's easy to understand why. Society is becoming more digital and automated. The last 10 years have seen the emergence of cloud computing, streaming video, digital advertising, the pandemic-era boom in electronic devices and work-from-home, all topped off by the introduction of generative artificial intelligence (AI) marked by the unveiling of ChatGPT in late 2022.

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However, after a long tech bull market, technology growth stocks have reached a worrying valuation level relative to other stocks, and today's relative overvaluation mirrors an infamous period in stock market history.

Echoes of the dot-com era?

In several ways, technology stock performance and valuations are currently mirroring the extremes of the dot-com boom of the late 1990s. Unfortunately, we all know how that period ended, with a terrible "bust" that sent the Nasdaq tumbling three years in a row, eventually culminating in a 78% drawdown from the March 10, 2000, peak.

QQQ data by YCharts.

How frothy are tech stocks?

Technology innovation can be very exciting; however, that excitement often finds itself in the form of high valuations. According to data published on Charlie Bilello's State of the Markets blog, the technology sector's recent outperformance has now exceeded that of the height of the dot-com bubble:

Image source: Charlie Bilello's State of the Markets blog.

The relative outperformance isn't the only mirror to the dot-com era. Back then, tech stocks also became very large, leading to an outperformance of large stocks relative to small stocks. Similarly, tech stocks are often growth stocks with high multiples, reflecting enthusiasm over their future prospects. This is in contrast to value stocks, which trade at low multiples, usually due to their more modest growth prospects.

As you can see below, the outperformance of large stocks to small stocks, as well as growth stocks to value stocks, is at highs last seen during the dot-com boom.

Image source: Charlie Bilello's State of the Markets blog.

Is it time to worry?

Given that higher-valued tech stocks now make up a larger portion of the index, the Schiller price-to-earnings (P/E) ratio, which adjusts for cyclicality in earnings over 10 years, while not quite at the levels of 1999, has crept up to the highest level since 1999, roughly matching the level from 2021:

S&P 500 Shiller CAPE Ratio data by YCharts. CAPE Ratio = cyclically adjusted P/E ratio.

As we all know, 2022 was also a terrible year for tech stocks. While it didn't see a multiyear crash akin to the dot-com bust, 2022 saw the Nasdaq decline 33.1% on the year. Of course, at the end of 2022, ChatGPT came out, somewhat saving the tech sector as the AI revolution kicked off.

Counterpoints to the bubble thesis

Thus, when compared to history, tech stocks are at worrying levels. Given the similarities to the 1999 dot-com bubble and the 2021 pandemic bubble, some may think it's time to panic and sell; however, there are also a few counter-narratives to consider.

The first is that, unlike in 1999, today's technology giants are mostly truly diversified, cash-rich behemoths that account for a greater and greater percentage of today's gross domestic product (GDP). While the late 1990s certainly had its leaders -- including Microsoft (NASDAQ: MSFT), the only market leader that is in the same position today as then -- they weren't really anything like today's tech giants, with robust cloud businesses, global scale, diversified income streams, and tremendous amounts of cash.

While market concentration in the top three weightings tends to occur before market downturns, index weighting concentration appears to be somewhat of a long-term trend now, increasing beyond prior highs in 1999 and 2008 since 2019.

Thus, it seems a higher weighting of the "Magnificent Seven" stocks could be a feature of today's economy, rather than an aberration.

While it's true that some of today's large companies are overvalued, given their underlying strength and resilience, it's perhaps not abnormal for them to garner higher-than-normal valuation multiples.

What investors should do now

It's important to know that while taking note of market levels is important, it is extremely difficult to time market downturns. Famed investor Peter Lynch once said, "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves."

So, one shouldn't abandon one's long-term investing plan just because overall market levels may be frothy. That being said, if you need a certain amount of cash in the next one to two years, it may be a good idea to keep that money in cash or Treasury bills until then, rather than the stock market.

Furthermore, if you have a regular, methodical investing plan, stick to it. But if you are consistently adding to your portfolio every month or quarter, you may want to look at small caps, non-tech sectors, and value stocks today, rather than adding to large technology companies.

Should you invest $1,000 in NASDAQ Composite Index right now?

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

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*Stock Advisor returns as of August 18, 2025

Billy Duberstein has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Federal Reserve Chair Jay Powell gave a speech at Jackson Hole this morning, citing a balance of risks in the economy.

• With interest rates still "restrictive," that could mean interest rate cuts in the months ahead.

• Lower rates could spur greater demand for Upstart's personal loans, as long as the economy holds up.

• 10 stocks we like better than Upstart ›

Shares of fintech lender Upstart (NASDAQ: UPST) rallied more than 8% to close the day on Friday.

Upstart is a tech-forward originator of personal loans and, to a lesser extent, auto and home loans. While Upstart doesn't hold loans on its balance sheet but rather sells them to third parties, the level of short-term interest rates can affect the buying appetite of those third parties.

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Thus, when Federal Reserve Chair Jay Powell suggested that the Fed may cut interest rates soon, Upstart jumped on the news.

Powell sees "balanced" risks, pointing to potential cuts

The Federal Reserve has a dual mandate, which includes stable prices and full employment. After the pandemic, inflation surged, and the Fed tightened by raising the federal funds rate at the fastest pace in history. While the Fed began easing last year, the central bank has held the FFR at 4.5% since December.

Rate hikes were a disaster for Upstart, which saw its third-party loan buyers flee from its platform. As a result, Upstart's revenue growth reversed to declines, and the company even resorted to holding some loans on its balance sheet, outside its preferred business model.

But in a highly publicized speech today at Jackson Hole, Wyoming, Fed Chair Jay Powell said, "The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance." In other words, a slowing job market means the Fed is as worried about jobs as it is about inflation today. The result could be more interest rate cuts soon.

In a vacuum, rate cuts are good for Upstart, as it lowers the cost of capital for Upstart's loan buyers and generally increases "risk appetite." That usually means more demand for Upstart's high-rate personal loans, so it's no surprise to see Upstart and many fintech stocks rallying big today.

But the speech wasn't an "all-clear"

As I said, rate cuts in a vacuum are good for Upstart. However, if rate cuts are necessary due to job losses, that could affect borrowers' ability to pay back loans and the risk appetite of Upstart's loan buyers. Meanwhile, inflation still remains above the Fed's 2% target, so any acceleration in inflation data in the months ahead could nix any rate cut plans.

In short, while rate cuts would be nice, investors shouldn't get carried away by today's jump. Risks to both the economy and inflation remain.

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*Stock Advisor returns as of August 18, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy.

Key Points

• Federal Reserve Chair Jay Powell suggested that the Fed could resume interest rate cuts soon.

• With a 4.2 times debt-to-EBITDA level, TreeHouse Foods would see some relief from lower rates.

• However, rate cuts are by no means assured, and the company's debt load remains a risk.

• 10 stocks we like better than TreeHouse Foods ›

Shares of private label food manufacturer TreeHouse Foods (NYSE: THS) rallied double digits on Friday, appreciating 10.5% as of 1:21 p.m. ET.

Today, Federal Reserve Chair Jay Powell appeared to hint at interest rate cuts in the months ahead. The prospect of rate cuts led to a bout of buying and short covering in many rate-dependent stocks. As a highly indebted name, TreeHouse was no exception.

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Jay Powell hints rate cuts could be possible

At the end of the pandemic, inflation jumped and the Federal Reserve hiked interest rates at the fastest pace in history. But while the Fed began cutting the federal funds rate last year, the last rate cut was in December. Since then, inflation has remained stubbornly above the Fed's target, causing the central bank to pause those cuts while keeping the funds rate "moderately restrictive" at 4.5%.

Today in a speech at Jackson Hole, Wyoming, Powell said, "the balance of risks appear to be shifting." What that means is that Powell currently sees as much risk to the job market as there is to inflation. That appeared to suggest more rate cuts could be coming in the months ahead, even as inflation remains above-target.

The markets took this hedged message enthusiastically, leading to a big jump in economically sensitive stocks. That included TreeHouse, given its high debt load.

At the end of the second quarter, TreeHouse had about $1.5 billion of debt and little cash, relative to its 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance of $360 million. That's about a 4.2 times leverage ratio, which is somewhat high. The company's interest expense was also $22.2 million last quarter, up 42% from last year.

So, the prospect of lower interest rates on that debt, along with perhaps more consumer spending due to lower rates, could help TreeHouse's financials in the year ahead.

Is TreeHouse a value opportunity?

With its stock down 45% this year and the prospect of lower rates on the horizon, TreeHouse could be an interesting opportunity. Shares trade at about 11 times this year's earnings estimates. And while the company's debt poses a risk, continued debt paydown could lessen that risk and spur a rerating.

That being said, Powell's words were far from an "all-clear," so any disappointing inflation numbers or a lack of follow-through on cuts could cause the stock to fall again.

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $650,499!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,072,543!*

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*Stock Advisor returns as of August 18, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• Ubiquiti absolutely crushed its fiscal-fourth-quarter earnings estimates.

• The company has successfully paid down a large portion of the debt it took on in the wake of the pandemic.

• With a restored balance sheet, management raised the dividend and announced a new repurchase program for the first time in years.

• 10 stocks we like better than Ubiquiti ›

Shares of Ubiquiti (NYSE: UI) had rocketed 25.7% on Friday as of 11:47 AM ET.

The company, which makes a variety of wireless broadband equipment and access points, reported fourth-quarter earnings this morning. Results crushed analysts' expectations, thereby appearing to justify Ubiquiti's high valuation.

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Ubiquiti quietly goes about its business

Ubiquiti doesn't disclose much beyond what it has to and doesn't host earnings calls with sell-side analysts anymore, given that founder and CEO Robert Pera owns some 93% of the company's shares outstanding.

Still, the numbers the company did disclose this morning were impressive. Revenue rose 49.6% to $759.2 million, while adjusted (non-GAAP) earnings per share surged 103.4% to $3.54 per share. Both figures absolutely crushed analysts' expectations.

Some may have been skeptical that Ubiquiti could justify its valuation, which now sits around 43 times earnings based on the fiscal year that just ended. However, these kinds of growth numbers could justify such a valuation if the company can keep it up.

Additionally, Ubiquiti just capped off its fiscal year in which it generated about $628 million in free cash flow, which allowed the company to pay down a significant amount of its debt. Ubiquiti decided to take on debt to buy up inventory after the shortages it experienced during the pandemic, but demand moderated afterward amid high inflation and interest rates. So Ubiquiti had stopped repurchases and dividend increases over the past couple of years as it directed cash to pay down that significant pandemic-era debt.

Fortunately, it appears net debt is now down enough that the company felt comfortable announcing a 33% increase in its quarterly dividend to $0.80, along with a new $500 million share repurchase program, in conjunction with earnings today.

Ubiquiti is expensive, but its low float makes it interesting

While Ubiquiti's stock isn't "cheap" by any means, there is an interesting dynamic here with Robert Pera owning so much of the company. Since the public float is only about 7% of all shares outstanding, if Ubiquiti continues repurchasing stock, that could create upward pressure on the share price merely due to a lack of sellers. The dynamic could eventually interest meme stock traders.

Should you invest $1,000 in Ubiquiti right now?

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The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ubiquiti wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $650,499!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,072,543!*

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*Stock Advisor returns as of August 18, 2025

Billy Duberstein and/or his clients have positions in Ubiquiti. The Motley Fool recommends Ubiquiti. The Motley Fool has a disclosure policy.

Key Points

• Blackstone delivered another solid revenue and earnings beat.

• The private equity giant rode a market recovery and steady inflows to achieve an AUM over $1.2 trillion.

• It's possible the Trump administration may open retirement accounts to private equity, which could add another boost.

• 10 stocks we like better than Blackstone ›

Shares of alternative investment giant Blackstone (NYSE: BX) rallied 4.5% today as of 2:06 p.m. ET.

Blackstone reported second-quarter earnings today that came in well ahead of analyst estimates, as the world's largest private equity firm continues to be the gold standard in the alternative investment world. And a potential new opportunity to raise capital from retirement accounts is adding to the optimism.

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Blackstone continues to roll on

In the second quarter, Blackstone's revenue grew 33% to $3.71 billion, while EPS grew a whopping 69% to $0.98, beating expectations.

Of course, the markets recovered strongly during the second quarter, which boosted realizations and accrued performance revenues. Meanwhile, Blackstone continued to rake in more assets under management, with inflows totaling a whopping $52.1 billion, roughly consistent with prior three quarters.

Total AUM grew to a stunning $1.21 trillion -- with a "T" -- up 12.4% relative to a year ago. Meanwhile, a significant portion of that AUM at around 15% is still in "dry powder," which isn't earning fees yet and can be redeployed opportunistically.

President Trump wants to open 401(k) accounts to PE

Blackstone shares rallied even over and above a recent rally spurred on by news reports that the Trump administration may issue an executive order that will allow private equity investments within 401(k)s and other retirement accounts.

That could be a boon to private equity firms like Blackstone, although the PE giants will also have to be careful about the opportunity.

On the conference call with analysts, current CEO Jonathan Gray said:

I think we all need to be patient here. But as we've talked about in the past, we think this is compelling for individual investors today in the defined contributions world. The access to alternatives, both the returns and diversification benefits, So we would expect this is going to happen at some point over time... it's obviously more appropriate for somebody earlier in their, sort of lifespan as opposed to somebody just on the cusp of retirement. And so I think the target date funds where we'll see this initially take hold. Obviously, it's a very large market. And for us specifically, the fact that we have created scale perpetual products that have track records that can absorb large amounts of capital that is a real competitive advantage.

While it appears all systems are a go for Blackstone, both in terms of recent investment performance and the prospect of more steady inflows and new sources of capital, much optimism is priced into the stock already, at 36.7 times this year's earnings estimates. Therefore, shares look like a hold for now, but perhaps not a buy until another market correction.

Should you invest $1,000 in Blackstone right now?

Before you buy stock in Blackstone, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Blackstone wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $634,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,046,799!*

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*Stock Advisor returns as of July 21, 2025

Billy Duberstein and/or his clients have positions in Blackstone. The Motley Fool has positions in and recommends Blackstone. The Motley Fool has a disclosure policy.

Key Points

• Nvidia announced it should be able to resume shipping its H20 chips to China soon.

• The move bolstered the stocks of virtually all Chinese AI companies.

• Alibaba's latest Qwen models have been shooting up the open-source model ranks.

• 10 stocks we like better than Alibaba Group ›

Shares of Chinese tech giant Alibaba (NYSE: BABA) rallied 8.1% on Tuesday.

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Alibaba is not only a leader in e-commerce and digital payments but also an artificial intelligence (AI) leader in China. Its open-source model Qwen is thought to be among the best open-source models out there, ranking close to or above the latest DeepSeek on independent scoring boards such as Live Bench.

Therefore, Alibaba rose today after AI chip giant Nvidia (NASDAQ: NVDA) suggested it would be able to recommence shipping its H20 AI chips to China once again after an April ban.

Nvidia assured investors it has assurances from the White House

Late on Monday, Nvidia wrote on its company blog that "NVIDIA is filing applications to sell the NVIDIA H20 GPU again. The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon."

In April, Nvidia was forced to stop shipments of its H20, which is a modified version of its Hopper AI chips to fit the Chinese market, and to apply for a license. Whether that halt had to do with the administration's negotiations with China over trade policy or not is unclear. After all, those trade negotiations are still ongoing.

Nevetheless, Nvidia's announcement boosted virtually all Chinese AI companies. Alibaba certainly fits that mold, with its Qwen open-source model being one of the best-performing models in China. Last month, Qwen's latest model leapt to the top of the Hugging Face leaderboard as the highest-performing open-source model today.

In addition to Qwen, Alibaba has also invested in an AI start-up named Moonshot. Moonshot just released its Kimi K2 AI model, which Kimi management claims tops the best ChatGPT models from OpenAI and Anthropic's Claude models in the specific task of software coding and at a fraction of the cost.

Alibaba should rank among the top of China's AI companies

It remains to be seen how China's AI companies will be able to compete against their U.S. counterparts, but that may not matter much in the case of Alibaba's stock, which revolves around its core China e-commerce business. As long as Alibaba has access to top AI chips and talent versus its competitors, it should be able to translate that into revenue and profit growth across its business empire spanning e-commerce, cloud, and digital finance.

Should you invest $1,000 in Alibaba Group right now?

Before you buy stock in Alibaba Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alibaba Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,005,670!*

Now, it’s worth noting Stock Advisor’s total average return is 1,053% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.

Key Points

• BlackRock delivered mixed earnings, leading to a sell-off.

• However, the bottom-line beat means shareholders shouldn't worry.

• Chalk today's decline up to a routine round of profit-taking after a big recent run.

• 10 stocks we like better than BlackRock ›

Shares of BlackRock (NYSE: BLK), the world's largest asset manager, fell 5.4% on Tuesday as of 3 p.m. ET.

BlackRock reported earnings that actually beat on the bottom line, but missed on the top line. With a somewhat full valuation and investors wary of how fast the world's largest asset manager can grow with markets at all-time highs, the stock shed some recent gains.

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A mixed quarter isn't good enough for Wall Street's expectations

In the second quarter, BlackRock grew revenue 12.7% to $5.42 billion, while adjusted non-GAAP (generally accepted accounting principles) earnings per share grew 16.3% to $12.05. That top-line number actually missed expectations, but the bottom-line figure handily beat expectations by $1.23.

The culprit behind the miss on revenues was a single institutional client that redeemed $52 billion on lower-fee indexes. That redemption led to lower-than-expected net inflows of $68 billion; however, as the redemption was of relatively low-fee indexes, BlackRock was still able to maintain strong profit growth.

Solid growth was also expected, too, because of BlackRock's $12.5 billion acquisition of Global Infrastructure Partners, which closed in October 2024.

Nothing except profit-taking

Today's sell-off likely has more to do with profit-taking following the stock's near-40% recovery off of April's lows than anything else. BlackRock shares also came into the day trading around 27 times earnings, while paying a dividend yield just under 2%.

That's not terribly expensive for a really high-quality growth company, although it's not especially cheap for a financial stock. Therefore, long-term investors in BlackRock stock should continue to hold, though those who don't would probably do well to wait for more market-related fear and a lower valuation to enter.

Should you invest $1,000 in BlackRock right now?

Before you buy stock in BlackRock, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BlackRock wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,005,670!*

Now, it’s worth noting Stock Advisor’s total average return is 1,053% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• Super Micro was seemingly vindicated from its accounting scandal at the end of 2024.

• Yet growth slowed as the Nvidia's AI customers moved from Hopper to Blackwell.

• But the company also inked a $20 billion deal in Saudi Arabia, spurring hope for the Blackwell cycle.

• 10 stocks we like better than Super Micro Computer ›

Shares of AI-focused server-maker Super Micro Computer (NASDAQ: SMCI) rallied 60.8% in the first half of the year, according to data from S&P Global Market Intelligence.

Super Micro entered 2025 after a somewhat disastrous second half of 2024, when it was attacked by a short-seller, followed by its auditor resigning in October.

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However, in February, Super Micro's new auditor, BDO, signed off on the company's financials from the prior three years. The seeming validation of the company, as well as optimism over AI growth in May and June, lifted shares strongly off a cheap valuation to start the year.

BDO signs off, and Super Micro blasts off

In its audit, BDO delivered an adverse opinion on Super Micro's internal controls and procedures; however, when actually reviewing transactions from 2022, 2023, and fiscal 2024, BDO noted that Super Micro's financial statements, "present fairly, in all material respects, the financial position of the Company."

So, Super Micro, while apparently being somewhat sloppy in its back-office procedures for a U.S. public company, was apparently cleared of the worst accusations of fraud. As a result, the company's stock rallied to over $66 per share in early February.

However, that rally was short-lived, as the stock soon gave way to the Trump Administration's tariff war. While Super Micro prides itself on being a U.S.-based server maker, its component supply chain and those of its chipmaking partners is very international. Thus, Super Micro soon fell back to earth along with many fellow AI companies.

Super Micro actually also had two somewhat disappointing earnings reports, as revenue growth missed expectations in both the December and March quarters. Still, the company posted 54.9% growth in the December quarter and 19.5% growth in March, which isn't so shabby.

Management chalked up the misses to a delay in the release of Nvidia's (NASDAQ: NVDA) Blackwell chips, which only began production in late 2024 and ramped up throughout the first quarter. So, it's possible that availability may have been limited in the March quarter as, "customers delayed making platform decisions," according to the company. But management also forecast a 30% sequential step-up in revenue for the current June quarter, which should mark the beginning of the Blackwell cycle for Super Micro.

About a week after May's earnings, Super Micro got another positive jolt after it inked a multi-year, $20 billion deal with Datavolt, a Saudi Arabian data center operator, as part of the Trump administration's strategic partnership with Saudi Arabia. Unsurprisingly, Super Micro and other AI companies rallied in the wake of that announcement.

Where Super Micro goes from here

Despite the first-half rally, Super Micro still remains far off its 2024 highs, and only trades at 16 times next year's earnings estimates.

That's not expensive for a high-powered AI stock, but Super Micro's uneven growth, questions over margins, and perhaps investor hesitance due to last year's short-seller attack have limited its valuation. It will be interesting to see how results come through as Blackwell ramps, and whether investor sentiment can continue recovering.

Should you invest $1,000 in Super Micro Computer right now?

Before you buy stock in Super Micro Computer, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Super Micro Computer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of July 7, 2025

Billy Duberstein and/or his clients have positions in Super Micro Computer. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Key Points

• President Trump intervened to try to broker a deal between EchoStar and the FCC.

• The FCC has been threatening to seize EchoStar's spectrum, saying its rollout of wireless services has been too slow.

• EchoStar bought some time from having to declare bankruptcy, but still has finalized a deal yet.

Shares of EchoStar Corporation (NASDAQ: SATS) rocketed 56.2% higher in June, according to data from S&P Global Market Intelligence.

EchoStar has been embroiled in a controversy with the Federal Communications Commission in the new administration, which has led to missed interest payments and the threat of bankruptcy.

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However, it appears President Trump intervened on EchoStar's behalf in June, extending the deadline for both parties to agree to a deal.

EchoStar's distressed stock explodes

Coming into the month, EchoStar's stock had fallen to distressed levels. That was to be expected; its core satellite TV business is declining, and its efforts to build a 5G mobile network that could rival the other major telecoms was going too slow for the government's liking. That led to a standoff with FCC Chair Brendan Carr, who had threatened to seize EchoStar's spectrum to sell to other companies. Amid the FCC review, EchoStar skipped interest payments on its debt, not knowing whether it would be able to continue building its mobile network.

In mid-June, President Trump intervened, calling for a meeting between EchoStar CEO Charlie Ergen and Carr, and apparently telling the parties to come to some sort of amicable deal.

After the meeting, EchoStar made $500 million in interest payments it owed before the 30-day grace period was up, buying the company more time to make a deal with the FCC. That being said, EchoStar decided to skip its $114 million interest payment due on July 1, starting another 30-day grace period before the company is technically in default.

EchoStar avoids bankruptcy, for now

Given its depressed stock price, it's no surprise to see a big gain when bankruptcy was avoided, and with President Trump seemingly having the company's back.

That being said, the company isn't out of the woods. EchoStar still has a massive $26 billion debt load and about $24 billion in net debt, and the success of its potential wireless business is still very much in doubt.

As such, it's probably best for investors to stay on the sidelines, especially since the stock has surged to a much higher valuation.

Should you invest $1,000 in EchoStar right now?

Before you buy stock in EchoStar, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and EchoStar wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Key Points

• Nebius rallied over 50% in June, on top of a 62% rally in May.

• Neoclouds have been soaring in the past couple of months, as optimism over AI grows again.

• One analyst said he liked Nebius' stock more than a high-profile competitor's, sending Nebius soaring.

Shares of artificial intelligence (AI) neocloud Nebius Group (NASDAQ: NBIS) rocketed 50.6% in June, according to data from S&P Global Market Intelligence.

Neoclouds and other AI-related stocks had great months in June in general, as the sector not only recovered from the April "Liberation Day" plunge, but also saw continued bullish data and statements from major tech CEOs on the growth of AI.

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In addition, one analyst wrote a note comparing Nebius to one of its main neocloud rivals, CoreWeave (NASDAQ: CRWV), preferring Nebius over its better-known competitor.

Arete gives Nebius the thumbs-up

On June 5, analyst Andrew Beale of boutique sell-side analyst firm Arete Research published a note, giving Nebius a "Buy" rating, with an $84 price target. In contrast, the analyst gave CoreWeave a "Neutral" rating. Beale concludes that both stocks will trade according to how short of graphics processing unit (GPU) supply the world is at the moment, but that he preferred Nebius due to its lower "embedded valuation" relative to CoreWeave.

Nebius actually trades at a higher valuation than CoreWeave based on this year's revenue estimates, with CoreWeave trading at about 14.5 times this year's revenue estimates of $5 billion. On the other hand, Nebius trades around 22 times 2025 revenue estimates of $526 million. However, Nebius has lots of net cash on its balance sheet of about $1.44 billion, while CoreWeave has about $6.2 billion in net debt. Nebius is also much earlier in its growth trajectory.

Nebius is unique

Like CoreWeave, Nebius is backed by Nvidia (NASDAQ: NVDA), which participated in an oversubscribed private placement in Nebius in December. Like CoreWeave, Nebius may have all the same advantages, including a preferred GPU allocation over other cloud providers, due to Nvidia's investment. However, both stocks also have the disadvantage of being highly dependent on Nvidia and Nvidia's competitive position in the industry.

Nebius differentiates itself by building its own data center server infrastructure, whereas CoreWeave tends to buy servers from others, and opts to differentiate itself through its in-house software and middleware.

It's hard to say at this point which is the better pick, given how similar their positioning is and how early we are in the AI infrastructure build-out. However, if one believes in an Nvidia-dominated AI future and that AI spending will continue to grow by leaps and bounds, both Nebius and CoreWeave are worth consideration.

Should you invest $1,000 in Nebius Group right now?

Before you buy stock in Nebius Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nebius Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $963,866!*

Now, it’s worth noting Stock Advisor’s total average return is 1,050% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Nebius Group. The Motley Fool has a disclosure policy.

Key Points

• CoreWeave submitted new benchmarks on its largest Nvidia Blackwell GB200 NVL72 cluster.

• The data release seemed to put CoreWeave ahead of other clouds in deploying the most performant Blackwell chips.

• The massive June rally happened on top of a miraculous 170% gain in May.

Shares of artificial intelligence (AI) neocloud CoreWeave (NASDAQ: CRWV) rocketed 46.5% in June, according to data from S&P Global Market Intelligence.

CoreWeave went public in March under a cloud of scrutiny and fears over tariffs. However, it has since become an AI darling, skyrocketing not only in May on the back of an incremental Nvidia (NASDAQ: NVDA) investment, but also in June.

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June's gains appeared to come from increasing optimism over AI-related growth, with CoreWeave publishing impressive leading benchmarks running Nvidia's latest Blackwell chips.

The largest and fastest GB200 NVL72 cluster in the industry

In early June, CoreWeave submitted MLPerf Training v5.0 benchmarks for its GB200 NVL72 cluster, in collaboration with Nvidia and IBM. CoreWeave's submission used 2,496 Nvidia GPUs running on CoreWeave's AI-optimized infrastructure. That infrastructure includes CoreWeave's proprietary software and middleware innovations such as SUNK, which allows customers to use a combination of popular AI training programming languages instead of having to choose just one. CoreWeave's Tensorizer software also routes data to the closest possible GPU, resulting in faster training times.

CoreWeave said its training cluster was 34 times larger than the only other cluster submitted for the same benchmark from a major cloud provider, underscoring CoreWeave's current advantage of deploying huge Nvidia clusters quickly. The company noted its infrastructure ran the large 405 billion-parameter Llama 3.1 model in just 27.3 minutes, more than twice as fast as other submissions.

CoreWeave may have an advantage due to Nvidia's investment, but also is risky

CoreWeave may be getting a preferred allocation of Nvidia chips before other major clouds, due to Nvidia's investment in CoreWeave, as well as all major clouds now pursuing their own AI training and inference ASICs.

So CoreWeave appears to have a time-to-market advantage versus others, which may make CoreWeave attractive to AI labs needing the latest and greatest Nvidia chips as quickly as possible in large numbers. For instance, OpenAI, thought to be the leading AI lab today, inked an $11.9 billion deal with CoreWeave in March.

That being said, CoreWeave is inherently at the mercy of Nvidia, which is both a supplier, investor, and customer, in a somewhat circular relationship. While the arrangement seems to be working for now, there is always the danger that if Nvidia ever gets a big competitive threat, things could get complicated for CoreWeave -- especially at its current elevated valuation.

Should you invest $1,000 in CoreWeave right now?

Before you buy stock in CoreWeave, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $963,866!*

Now, it’s worth noting Stock Advisor’s total average return is 1,050% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Billy Duberstein and/or his clients has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines and Nvidia. The Motley Fool has a disclosure policy.

Shares of Broadcom (NASDAQ: AVGO) rallied 4.2% on Tuesday, as of 1 p.m. ET.

Semiconductors were broadly higher, based on new data that confirmed strong growth in the sector. In addition, one Wall Street sell-side analyst wrote a very positive note on Broadcom specifically, and the outlook for its custom artificial intelligence (AI) ASICs.

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Broadcom to $400?

Today, research firm Counterpoint Research released its final data for the semiconductor foundry industry's first quarter of 2025. Counterpoint's data showed a solid 13% increase in foundry revenue, which the firm noted was powered by artificial intelligence chips, especially those made by Taiwan Semiconductor Manufacturing.

That includes Broadcom, which has a large part of its semiconductors produced by TSMC, especially its custom AI ASIC chips that it co-produces for the large cloud giants. And if foundry revenue grew strongly in the first quarter, that could likely mean strong chip sales in the second quarter, given that foundries produce chips before they're sold.

On that note, HSBC semiconductor analyst Frank Lee raised his price target on Broadcom today from $240 to a whopping $400 per share, representing 53% upside from today's stock price.

The massive jump is based on Lee's conviction that AI ASICs will now achieve better-than-expected growth relative to prior expectations, perhaps taking more AI market share from Nvidia and Advanced Micro Devices. Lee increased his estimates for Broadcom's ASIC revenue to $28.4 billion in 2026 and $42.8 billion in 2027, which are 42% and 69% above the average analysts' expectations, respectively.

But investors may want to be wary of valuation

No doubt, Broadcom has defied skeptics over the past five years and has regularly trounced expectations. That being said, the stock already has a premium valuation. Lee's $400 target is based on 32 times 2027 earnings estimates. That's actually a 10% premium to Broadcom's peak P/E ratio over the past three years. So not only does Lee predict better-than-expected growth, but he also puts an all-time high valuation on future earnings estimates to get to $400.

That's not to say Broadcom can't do it; however, the stock is no longer a no-brainer to reach new heights in the very near term. But even skeptics would have to say the chip giant is extremely well positioned in the AI era.

Should you invest $1,000 in Broadcom right now?

Before you buy stock in Broadcom, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Broadcom wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

Now, it’s worth noting Stock Advisor’s total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

HSBC Holdings is an advertising partner of Motley Fool Money. Billy Duberstein and/or his clients have positions in Broadcom and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and HSBC Holdings. The Motley Fool has a disclosure policy.

While it appears as though a temporary ceasefire may be on the horizon, the war between Israel and Iran is likely to linger into the future, with the U.S. now involved to a degree after last weekend's bombings of Iran's nuclear facilities.

If things were to re-escalate, the Iranian regime could take a worst-case, most damaging counter-measure by blockading the Strait of Hormuz, the narrow waterway between Iran and Oman through which 21% of the world's oil consumption flows.

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If that were to happen, oil prices would spike in the short term and stocks would probably move lower. However, the following U.S.-focused oil and gas giants would each benefit, with one being a Warren Buffett favorite.

ConocoPhillips

ConocoPhillips (NYSE: COP) is one of the largest U.S.-based oil and gas giants, which also has a very high concentration of its exploration and production in the United States. Although ConocoPhillips is diversified geographically, about 75% of its operating earnings come from the contiguous U.S., Canada, and Alaska. The next largest segment is in the Pacific, across China, Malaysia, and Australia.

A remaining 12.5% or so of its earnings comes from Europe, Middle East, and North Africa. While ConocoPhillips does have some production in Qatar, which would be affected by the closing of the Strait of Hormuz, that production is just a portion of this segment, and thus a small fraction of Conoco's overall production.

Conoco currently trades fairly cheaply, at just 11.6 times earnings with a 3.4% dividend yield, reflecting a low-growth outlook. However, if oil prices were to spike, management says that for every $1 increase in the price of Brent crude oil, Conoco would increase its operating cash flow by $65 million to $75 million. For every $1 increase in West Texas Intermediate, Conoco would see an additional $140 million to $150 million.

Conoco gives investors the strength of a very large-cap oil company with an excellent balance sheet and relatively low debt for its size, at less than equal to EBITDA. So it's a risk-off play for those who nevertheless would like concentrated exposure outside the Middle East.

EOG Resources

EOG Resources (NYSE: EOG) is present in most of the major shale plays in the United States, along with exploration properties in Trinidad and Tobago. As a 100% U.S.-based producer, EOG's cargos obviously don't flow anywhere near the Strait of Hormuz.

EOG has also been an excellent operator, having steadily ramped its cash flow, and along with it, total shareholder returns. Between 2021 and 2024, EOG has more than doubled its dividend, which now yields 3.3%, while also adding share repurchases. In that same time span, EOG has increased its total shareholder payouts, dividends and repurchases included, from 48% of free cash flow to 98%.

EOG has also been able to garner higher-than-average oil and gas price realizations than its peers, thanks to its well positioning near low-cost pipelines and storage operators, which enables EOG to realize more of its oil and gas sales than others. That means if the price of oil spikes on a Middle East geopolitical conflict, EOG Resources could disproportionately outperform.

EOG has been able to return so much cash to shareholders because of its excellent balance sheet, which is actually unlevered, with more cash than debt. As such, it's another low-risk way to play U.S. shale.

Occidental Petroleum

A third great option for U.S.-focused investors is Warren Buffett holding Occidental Petroleum (NYSE: OXY). Although Occidental does have some of its production in the Middle East, specifically Oman, which would be affected by any closure of the Strait of Hormuz, about 84% of its production comes from the U.S., with over half of its total production concentrated in the oil-gushing, low-cost Permian Basin in West Texas, where Occidental has 2.9 million acres of land.

Occidental's onshore inventory is also very deep, with 13 years of production at the today's rates at breakeven prices below $60 per barrel, with 10 years of inventory with breakeven costs under $50, and a good portion of those wells having breakeven costs below $40.

Meanwhile, Occidental has a history of lowering costs over time, opening up more of its inventory. On the recent earnings release, Occidental management noted that it had reduced well costs by 12% across its U.S. fracking portfolio since 2023.

As the company with some of the deepest inventory in the Permian Basin, Occidental is very well positioned for the long term, which is probably why Buffett is such a fan. And of course, if non-U.S. supply was cut off for any reason, because of the closing of the Strait of Hormuz or some other geopolitical event, Occidental would be a prime beneficiary.

That being said, Occidental also has a higher debt load than the other companies mentioned, especially after its $12 billion acquisition of CrownRock last year. So that's something for investors to monitor. However, should the price of oil spike, Occidental may have more upside as a leveraged play on U.S. oil and gas.

Should you invest $1,000 in Occidental Petroleum right now?

Before you buy stock in Occidental Petroleum, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Occidental Petroleum wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

Now, it’s worth noting Stock Advisor’s total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Billy Duberstein and/or his clients have positions in ConocoPhillips. The Motley Fool has positions in and recommends EOG Resources. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.

Shares of oil and gas services firm Halliburton (NYSE: HAL) rallied as much as 4.7% on Friday, before settling into a 3.4% gain as of 12:30 p.m. ET.

Halliburton is the third-largest oilfield services company in the world, so any time oil prices go up, it's a recipe for potential further investment by oil companies in exploration, completion, and production enhancement services.

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So, it's no surprise that Halliburton was rising when oil prices spiked on Friday, following Israel's strike on OPEC+ country Iran.

Israel pummels Iran's nuclear and military capabilities

Last night and early this morning, Israel struck Iran's nuclear facilities and military complexes, along with targeted assassinations of top Iran Revolutionary Guard military officials and nuclear scientists.

While details are still becoming known, it's pretty clear the Israeli strikes have been very devastating for Iran. Of note, Iran is the fourth-largest oil producer in the OPEC+ cartel, and the world's third-largest producer of natural gas.

On Friday, oil prices were up 6.3% on the news of the strikes, even though a spokesperson for Iran said that the Israeli strikes hadn't targeted oil production facilities or refineries within the country -- only military and nuclear facilities. Nevertheless, the prospect of an escalating regional war in the oil-rich Middle East still led to a spike in oil prices today, which had fallen substantially to begin the year.

Halliburton stock is cheap, but also for a reason

Amid the recent downturn in oil prices, Halliburton has delivered fairly lackluster results, with revenue down 6.7% in its recent quarter. That being said, Halliburton's stock valuation is also very low, at just 9.2 times trailing earnings and about 8.6 times this year's earnings estimates, with a dividend yield of 3.1%.

Like most oil stocks, Halliburton doesn't have great growth prospects, and is also cyclical. However, Halliburton and other oil stocks can effectively serve as a hedge against global wars that threaten oil supplies, as we're seeing today, while also paying a dividend along the way.

Should you invest $1,000 in Halliburton right now?

Before you buy stock in Halliburton, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Halliburton wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $888,780!*

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*Stock Advisor returns as of June 9, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Shares of Korean e-commerce giant Coupang (NYSE: CPNG) rallied 20% in May, according to data from S&P Global Market Intelligence .

Coupang reported first quarter earnings in the early part of the month, and while results may have looked mediocre on the surface, they were actually much better than advertised.

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Stocks in general also generally climbed in May, as April's trade tensions eased somewhat, adding an additional tailwind.

Coupang promises 20% growth this year

In its first-quarter report, Coupang grew revenue 11%, which missed expectations, although earnings per share of $0.06 beat expectations by $0.01. Yet while that headline revenue figure "missed," that was likely due to a massive currency effect. In constant currency of largely the Korean won, Coupang's growth was actually 21%.

Coupang's main products segment, largely reflecting its Korean e-commerce services, grew 6% to $6.9 billion and 16% in constant currency, with customers up 9% from last year. Meanwhile, Coupang's smaller Developing Offerings, which include international e-commerce, the Eats delivery platform, Play, Fintech, and luxury e-commerce platform Farfetch, grew 67% to $1.0 billion, or 78% in constant currency.

Management also showed its confidence by authorizing a $1 billion share repurchase program.

The two big positives were one, management's projection for 20% revenue growth in constant currency for the full year, which means it's optimistic the current growth cadence will continue despite economic uncertainty. Second, Coupang showed impressive margin expansion in the quarter. In Q1, gross margins expanded 2.1 percentage points, with product segment gross margins up 3.0 percentage points, while adjusted EBITDA margins expanded 0.88 percentage points and product EBITDA margins grew 0.81 percentage points.

E-commerce stocks usually suffer from low margins, so that margin expansion was a big positive sign.

Coupang continues to execute, but the stock looks expensive

After its recent run, Coupang's market cap has rallied to over $51 billion, or over 200 times earnings and 130 times this year's earnings estimates. While the company appears to be dominating the Korean e-commerce market, it looks like investors are anticipating some of its other developing offerings to become big businesses as well.

That being said, this past quarter showed promising execution and margin expansion from Coupang's team. So, it's not a surprise to see the stock higher, as consumer-oriented stocks largely recovered from the April tariff-related malaise.

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EchoStar (NASDAQ: SATS) shares were bouncing back today, up 10% as of 2 p.m. ET.

EchoStar's shares have been under severe pressure since the beginning of the year, but especially in the past week. That's because management decided to not make two separate interest payments on its debt, as it awaits a decision from the FCC regarding its spectrum. Management has a 30-day grace period to do so before the company is technically in default.

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The spectrum debate has to do with the pace of EchoStar's 5G rollout, and is also indirectly linked up with Elon Musk's SpaceX.

Can EchoStar bounce back?

Back in May, the new Trump-appointed FCC director sent a letter to EchoStar, stating that the extension it was granted to complete its 5G network buildout by the prior administration was under review. EchoStar had purchased valuable spectrum years ago, on the terms that it would build a 5G network to increase competition in the industry. However, EchoStar's buildout has been slow, which is perhaps not surprising, given its declining legacy business in satellite TV.

In an interesting wrinkle, Musk's SpaceX had led a campaign to win more satellite spectrum for its own services, including the spectrum held by EchoStar. That may have played a part in the FCC's initiation of a review, given Musk's ties to the Trump administration.

However, late yesterday, EchoStar issued a press release introducing its new Boost Mobile Celero tablet, the Celero5G TAB, a low-cost tablet that takes advantage of EchoStar's 5G network. While normally not that significant, the announcement of a new 5G product could go a ways toward making EchoStar's case to the FCC that it deserves to keep its spectrum.

Furthermore, it appears Musk's relationship with the Trump administration is now on the outs, given Musk's storm of posts today criticizing the administration and Republicans in Congress for the deficit expansion in the "Big, Beautiful Bill" making its way through Congress.

If Musk and Trump have a falling out, then the FCC may not aggressively pursue EchoStar's spectrum on behalf of SpaceX, if SpaceX's campaign was in fact a motivating factor in initiating the review.

EchoStar is a high-risk, high-reward turnaround play

EchoStar's stock has been punished severely, so it could make for a turnaround play if in fact it's able to deploy 5G to more areas and grow its low-cost Boost Mobile offerings. However, its high debt, declining legacy satellite TV business, and unresolved battle with the FCC remain big risks.

Betting on a big recovery is a highly risky proposition, and only appropriate for speculators at this point.

Should you invest $1,000 in EchoStar right now?

Before you buy stock in EchoStar, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and EchoStar wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Shares of Navitas Semiconductor (NASDAQ: NVTS) rocketed 164.2% in May, according to data from S&P Global Market Intelligence.

Entering the month, Navitas has been a small designer of gallium nitride (GaN) and silicon carbide (SiC) chip designs. These niche chips had primarily targeted electric vehicles and electrified infrastructure. But given the recent downturns in these markets, Navitas had seen its revenue go into reverse and its bottom line continuing to lose money.

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But in mid-May, Nvidia named Navitas as a key partner for Nvidia's upcoming Kyber data center infrastructure, which will be a new architecture to support Rubin-based sever racks beginning in 2027.

While other power chip providers were also named, the fact that Navitas was so small, at just $350 million or so market cap at the time of the announcement, caused a massive rally in the stock.

Navitas then used the opportunity to sell stock and bolster its balance sheet, extending its runway, likely until the 2027 time frame.

Nvidia helps out the tiny Navitas

As Nvidia explained in a May 20 blog post, the current 54 V DC power distribution systems in today's data centers will push up against their physical limits as AI server racks go to needing 200 kilowatts to power next-generation AI chips.

To counter this, Nvidia is developing a ground-up redesign of data centers to an 800 V HVDC power architecture. Nvidia also noted that it was collaborating with a number of power chip and infrastructure companies early on as it develops the new data center power infrastructure, which Nvidia plans to unveil in 2027 for its upcoming Rubin-based systems.

The following day, Navitas published its own blog post explaining how the new 800 V architecture will use both Navitas' SiC chips in the power room of data centers, which convert AC grid power to DC power for the data center, and then GaN-based power converters at the server rack level.

The day of the blogs, May 21, Navitas rocketed 150% higher, before retreating. But then the following week, Navitas disclosed it had exhausted its $50 million equity at-the-market sales facility, and that it had filed for a new $50 million facility. Normally, when a company notes it has and will dilute shareholders, the stock goes down. But since Navitas' stock had gone up so much, investors viewed the capital raise as a positive, in that it fortified Navitas' balance sheet to bridge more of the time gap between now and 2027.

Navitas is an intriguing story, but risky

While the prospect of a small company partnering up with Nvidia is highly tantalizing, there weren't any financial terms disclosed in the announcements. That makes sense, as the platform isn't even fully developed yet, and revenues from the venture aren't likely to come before 2027.

So it's hard to say right now if Navitas has moved too far, too fast. Still, last month's cash raise will bolster Navitas' balance sheet, giving it more time to build out its platform in anticipation of the 2027 Kyber rollout.

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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Shares of Nvidia (NASDAQ: NVDA) rallied 24.1% in May, according to data from S&P Global Market Intelligence.

While Nvidia reported an earnings beat late in the month, that post-earnings gain only amounted to a small portion of May's gain.

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Before the earnings release, Nvidia, like many technology stocks, rallied in a big way when tariff tensions eased in mid-May, after the U.S. and China announced a détente in their trade dispute, paving the way for talks. Around that time, the Trump administration also made deals for significant AI chip sales to the United Arab Emirates and Saudi Arabia.

Nvidia is part of the art of the deal

Like many technology and semiconductor stocks, Nvidia rallied in a big way after May 12, when U.S. and China agreed to ratchet down their tariffs on each other. The U.S. lowered its tariffs on Chinese goods from 145% to just 30%, which incorporates the 10% universal tariff and extra 20% tariff meant to penalize China for the flow of fentanyl to the United States.

Nvidia, like most stocks, especially technology stocks, rallied on the news, as these stocks had still yet to fully recover after the post-"Liberation Day" stock market crash on April 2.

The immediate "relief rally" was soon followed by the announcement of large AI deals the Trump administration struck with both Saudi Arabia and the UAE. In Saudi Arabia, Humain, a division of the Saudi Arabia Public Investment Fund, will build a 500 MW AI cluster, composed of "several hundred thousand" Nvidia GPUs, which will be deployed over the next several years. In addition, a deal was soon reached with the UAE's G42, whereby Nvidia will be able to ship 500,000 Nvidia chips, starting this year.

These big deals in the Middle East probably boosted Nvidia's growth expectations, as the current administration also officially nixed the Biden administration's "AI diffusion rule." That rule was supposed to go into effect May 15 and was to limit AI chip sales to certain countries depending on their friendliness to the U.S., as well as the potential for chips to be smuggled to adversaries such as China.

Yet while the administration relaxed chip sales to countries such as the UAE and Saudi Arabia, it erected even stronger barriers to China. In April, the Trump administration banned the sale of Nvidia's H20 chip to China, which was a modified version of Hopper deemed appropriate for the Chinese market. But without guidelines for a replacement, Nvidia had to take a $5.5 billion inventory charge to its H20 inventory.

Despite the Hopper limitation, Nvidia was still able to beat expectations for its fiscal first quarter ending in April and reported on May 28. In the quarter, revenue grew 69% to $44.1 billion, with adjusted (non-GAAP) earnings per share up 33% to $0.81. The lower profit growth was due to the H20 writedown, but Nvidia was able to beat expectations anyway.

All in all, the results seemed to reassure investors that the company should be able to manage geopolitical tensions, and that its supply issues ramping the new Blackwell chip have largely been resolved.

Bear and bull cases swirl about

After May's recovery, Nvidia trades at 44 times earnings and 31 times forward earnings.

That's a reasonable multiple if Nvidia can maintain its dominance in AI systems and find a way to regain some of its lost China revenue. This year, all eyes will be on the company's new Blackwell chip, as well as how Nvidia's customers innovate new and exciting AI use cases.

On the risk side, investors should watch for newer custom AI chips designed in-house by the cloud giants, which could continue to take share. While Nvidia is currently the dominant standard in neutral GPUs that work for a variety of uses cases, the emergence of custom chips that can run workloads at much lower prices could eventually slow down Nvidia's torrid growth.

So with Nvidia's stock now back closer to all-time highs, the risk-reward is more balanced today.

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Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $842,015!*

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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Shares of government technology consultancy Booz Allen Hamilton (NYSE: BAH) fell on Wednesday, down as much as 4.9% before recovering modestly to a 4% decline as of 1:37 p.m. ET.

Booz Allen sold off by a double-digit number last Friday following its fiscal-fourth-quarter earnings release, before recovering a bit yesterday. But today, sell-side analysts downgraded their ratings and price targets, and these delayed negative takes from last week's earnings appear to be sending shares down again today.

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Goldman Sachs downgrades to sell

Today, analysts at Goldman Sachs downgraded Booz Allen Hamilton shares from neutral to sell, while lowering the firm's price target on shares from $108 to $94. As of this writing, Booz Allen's stock price is $104.75.

The Goldman analysts downgraded shares because they now see medium-term earnings growth as "flat," given the new outlook from management on last Friday's conference call with analysts. On that call, management noted that it sees revenue growth between 0% and 4% in fiscal 2026 (ending in March 2026), down from 12.4% last year, with an adjusted (non-GAAP) earnings range of $6.20 to $6.55. That compares with $6.35 earnings last year.

If by "the medium term" Goldman means the one-year outlook, it's right on that front. And if that remains the growth rate for Booz Allen going forward, then yes, the current multiple of around 16.5 could be correct, or even a little high.

But there's a high likelihood growth resumes after this year

Goldman seems a bit short-term-oriented and pessimistic here, assuming this year's DOGE cuts are a one-time reset. Booz Allen projected a low double-digit decline in its civil business this year, which makes up 35% of its revenue. But that means its defense and intelligence businesses, which make up 65% of revenue, are still likely to grow in the double digits, in order for the whole company to reach management's 2% overall growth projection. Of note, Booz Allen has grown at an 11.7% organic rate over the past three years.

But if the civil business stabilizes after this year, it seems like Booz Allen should continue to resume its prior growth rate in 2027. That means its P/E multiple could go back to the low-20s, which has been about its average over the past decade.

Thus, long-term-oriented investors may wish to look at Booz Allen shares on this recent weakness.

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Billy Duberstein and/or his clients have positions in Booz Allen Hamilton and has the following options: short December 2025 $55 puts on Booz Allen Hamilton. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool recommends Booz Allen Hamilton. The Motley Fool has a disclosure policy.

Shares of quantum computing company IonQ (NYSE: IONQ) skyrocketed 37% on Thursday, after CEO Niccolo de Masi sat down with Barron's for an interview. During the interview, he outlined a lofty goal for the company, and even said that IonQ would be the "Nvidia" of quantum computing.

However, a mere aspirational comment like that shouldn't put this speculative stock up by this much. Delving into the interview, there really wasn't anything tangible to warrant this kind of stock price increase.

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An Nvidia mention gets you far

As we've seen over the past two years, whenever a stock is compared with Nvidia or has been shown to have received an investment from or partnership with the company, speculators tend to pile in. This happened just last week with respect to newly public "neo-cloud" CoreWeave, which skyrocketed after it was disclosed Nvidia had increased its position in the stock.

However, that can be a double-edged sword. After all, SoundHound AI plunged earlier this year when it was disclosed Nvidia had sold its entire stake in the company. SoundHound's stock hasn't recovered.

In the Barron's interview, De Masi said of the quantum computing industry: "I believe IonQ will be the Nvidia player. There will be other people that copy us and follow us; they have always copied and followed us."

No doubt, IonQ was the first publicly traded quantum stock, with IonQ's strategy focused on early commercialization through its trapped-ion process. Meanwhile, other competitors have taken other approaches they believe will ultimately win out, but may take longer to commercialize.

Later in the interview, de Masi predicted that someone would "pay hundreds of billions of dollars to buy IonQ," because he anticipates a major cloud computing provider will want IonQ's quantum technology in-house as a differentiator.

Given that the company's market cap was only around $8.75 billion heading into today, it's perhaps not surprising the stock is seeing a big surge on those comments.

But there's no "there" there -- yet

Investors should be very cautious of any quantum computing stock, and especially of chasing one on a day like today. For all of de Masi's talk, IonQ only generated $7.6 million in revenue last quarter, with a $32.3 million loss.

And for all the "Nvidia" parallels, it's very unclear how big the quantum computing market will be. Furthermore, Nvidia was able to develop its artificial intelligence (AI) GPUs and CUDA software almost completely unchallenged for 15 years, prior to the explosion of AI technology. However, IonQ not only has a slew of start-up competitors, but the large cloud players De Masi references mostly also have their own in-house quantum research as well.

Needless to say, this rally is largely based on hype, and could be driven by meme stock investors trying to force a short squeeze, with about 18% of IonQ's stock sold short. But as we've seen in the past, big surges like this can be fleeting. Quantum commercialization is still years away -- perhaps many years.

Should you invest $1,000 in IonQ right now?

Before you buy stock in IonQ, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and IonQ wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $807,814!*

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Billy Duberstein and/or his clients has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.